eventually does get it. can we get there? does he get the pool inside? i think he finally does. pawing at it. come on, pool, we're going to get there. let's all watch. come on, gus. come on, gus. come on, gus! and there he goes. that is it for me. i hope it made you smile. thanks so much for watching us here. now, wolf blitzer, "situation room" starts right now. wolf? >> brooke, thanks very much. happening now, breaking news. that critical house vote on the republican debt plan back, it's back on right now, almost 24 hours after a huge rift in the party brought it to a screeching halt. do the republicans now have the 216 votes needed to pass? we're only moments away from the vote and when it happens, we'll bring it to you live right here in "the situation room". plus, it's arguably his most defining moment as the house speaker. john boehner now desperately struggling to prove he has what it takes to keep a new

generation of republicans in line. and president obama warns, and i'm quoting him now, we are almost out of time, urging all americans to keep the pressure on washington and bring this devastating crisis to an end. i'm wolf blitzer, you're in "the situation room." you're looking at a live picture right now of the house floor, where just a short time from now, we expect to see that critical vote on the gop debt plan. the vote was supposed to happen yesterday around this time, but was abruptly postponed when the house speaker john boehner failed to get the 216 votes it needs for passage. meanwhile, with only days left to solve this unprecedented crisis, wall street is already reeling. stocks posted their worst weekly performance in more than a year while the dow fell about 97 points today. this on the heels of a dismal new economic report out today, showing the country's economic

growth has now slowed to a crawl. let's go straight to our congressional correspondent, kate balduan. she's on capitol hill, where it's shaping up to be not only a very long night, but a very long weekend. set the scene for us, kate. >> reporter: the breakthrough for house republican leaders seemed to come early today in a closed-door meeting with republican members. republican members emerged from this meeting and the no votes from last night seemed to turn to yeses. listen here to a couple. >> absolutely, an enthusiastic yes. >> reporter: and why? for the american people who don't understand, why are you an enthusiastic yes? >> because we've got short-term in regard to the cuts, we've got medium-term financial reform in regard to the cap, and we've got long-term financial reform in regard to the balanced budget amendment. >> i'm on board, because i say in there, i see this just as a variation of cut, cap, and balance. a good variation that gets us

through this logjam, if you will. >> reporter: so what changed? well, leaders changed the bill, making the second debt ceiling extension, which would happen early next year, contingent upon congressional passage of a balanced budget amendment. the original bill only called for a vote on the amendment, not passage. and this comes as a result of the serious pushback that leaders were getting from conservative members who didn't think the bill went far enough, and it clearly was part of what was holding up the vote last night. but while leaders are not themselves predicting certain victory, i'll tell you, wolf, that members emerging from this meeting, they are, at this point, predicting that they will have the votes to pass this. but the reality is, as we've been talking all along, that if this bill passes, it still seems to be dead on arrival in the senate. listen here to the senate majority leader, harry reid. >> i'm not standing in line to see how many times we can amend the constitution. but you know, if people wanted to vote on that, fine. but as senator schumer pointed

out, to show the extremism of these people, the extremism of these people, they're not satisfied with ta vote on it. they want a guarantee that it passed, it passed before they'll allow an extension of the debt limit. i mean, how bizarre can anyone be? >> reporter: bottom line, it looks like once this step, the house vote, this vote is over, and we do have finality here in the house, then the real negotiations, it seems, towards this, whatever the end game is, will begin. wolf? >> the negotiations will begin in the senate first and foremost, and then they'll eventually have to bring members of the house in. we'll see how they work all weekend. kate, thanks very much. let's go to the white house right now, where president obama is warning that washington, quote -- he's warning washington, we are almost out of time. one senior administration official there saying the president has been suffering some sleepless nights lately. our chief white house correspondent jessica yellin is over at the white house with more. jessica, set the scene over at

the white house for us a little bit. what's the mood there? >> reporter: wolf, there's deep frustration here that it's friday already and the entire city is waiting on what democrats view as a political exercise in the house, when they feel there's an urgent need for a solution that democrats and republicans can both sign on to to get a compromised bill done. that is the word the white house has been using, but it's also a reality that you need both democrats and republicans to pass something in congress. here was the president earlier today. >> right now the house of representatives is still trying to pass a bill that a majority of republicans and democrats in the senate have already said they won't vote for. it's a plan that would force us to relive this crisis in just a few short months, holding our economy captive to with washington politics once again. in other words, it does not solve the problem. and it has no chance of becoming law. >> reporter: and tonight all eyes will be on two things --

one, to see what speaker boehner and leader cantor say after their bill is voted on. will they signal a willingness to sit down with democrats and talk to them about the next steps? and two, to see what happens in the u.s. senate between harry reid and mitch mcconnell, can they strike a deal. wolf? >> because what happens next is going to be very, very intense. we have one position, the republican house position, there has to be another vote within a few months, basically. this whole process, they have to go through it once again. they have to vote at that time on a balanced budget amendment to the constitution. harry reid, the democrats in the senate say that's a nonstarter. the president says he would veto that. so it looks like they're potentially at an impasse. >> reporter: potentially at an impasse, but again the hope is that there could be some kind of a negotiation between the leaders in the senate, harry reid, the democrat, and mitch mcconnell, the republican. and as you know, vice president biden has had a long

relationship with leader mcconnell, and that leader mcconnell has made deals in the past. my understanding is that so far to date, mcconnell and reid have not been able to come to terms and that the republicans are holding out, waiting to see what happens with speaker boehner's vote before negotiating anything. but the hope remains that something will be negotiated after speaker boehner's bill is voted on. here from the white house, i can add, wolf, that it is -- my sources -- my democratic sources are telling me that president obama has not spoken with john boehner still today, that the president has been in touch with other members, both other members on the hill. vice president biden has been in touch both with the house and the senate and staff discussions continue, but still no progress toward a compromised solution. so we remain at that impasse we've within e been at all week wolf. >> so we knew yesterday that the president hasn't spoken to boehner. that continues yet for another day. why doesn't he just pick up the

phone and call him and say, john, we've got to do something? >> reporter: it's my understanding that the speaker has been focused on his bill and that has been made clear, that he's focused on getting his bill passed through the house and that it's a sense that right now it's up to congress to get their job done. i'm also given to understand that if it's decided that a meeting here at the white house would be helpful to get things done over the weekend, we could see one added to the schedule, wolf. >> all right. we'll stay in close touch. we'll see what happens. jessica, thank you. president obama is pushing all americans to keep the pressure on washington as time runs out on a deal. and it appears thousands now are doing just that. let's go to cnn's athena jones. she's up on capitol hill where the phone calls, the e-mails, the tweets, they're pouring in, athena, right now. what's going on. >> reporter: peopling are asking, what's the public's role in this? well, as we found out, voters are not staying silent. >> congressman tim murphy's office. >> reporter: it's down to the

wire. >> the house will be in order. >> reporter: constituents are flooding congressional offices with calls. ft. again urging americans to make their voices heard. >> so, please, to all the american people, keep it up. make a phone call, send an e-mail, tweet. >> reporter: the obama campaign used their official twitter account to push followers to pick up the phone. >> congressman murphy is working down here to work with both sides. >> reporter: and about an hour after mr. obama spoke, the house administrative office sent out an alert that some phone systems were near capacity, with long wait times. we decided to check it out with one republican. we're here talking to members and their staff about the high volume of phone calls, e-mails, and even facebook messages they're getting from constituents about this debt ceiling vote. i'm going to go in here and talk to congressman tim murphy from pennsylvania. staffers here say the number of phone calls, e-mails, and faxes they're receiving has tripled since last week. what are they saying? where are they coming down on this debt ceiling vote?

>> i guess the universal comment is "enough is enough." fix this problem. >> reporter: murphy who made up his mind to support the boehner bill in the last few days says he gets daily updates on constituents' comments. >> reporter: one thing a lot of constituents would ask is does my phone call or my e-mail or my facebook post really matter? has it asked how you made this decision? >> yes, it does matter. and i have told people, the call you don't make, the fax you don't send, the e-mail you don't write, we don't read. but if you send something, we go through them all. >> reporter: dozens of people have taken to facebook to urge the congressman to vote for or against the boehner bill. like this one, "don't compromise what you know to be right in your heart." and this one, "the debt ceiling must be raised now. what is wrong with congress that they can't see that?" and the phones keep ringing. >> congressman mulvanemulvaney'

office. >> reporter: now, congressman poe has been on the fence, and earlier this afternoon, he was still undecided. no word yet on whether he's made a decision in the last couple of hours. and wolf, one more thing about those phone calls and e-mails. one congressman's staffer told me, they'd like to see the public this engaged all the time, not just at times like this. wolf? >> athena, thanks very much. athena jones, our newest correspondent up on capitol hill. welcome, athena, to cnn. we're looking forward to a nice, long ride with you. appreciate it. >> reporter: thanks. >> you picked a busy week to start working. bracing on wall street for an unprecedented crisis. just ahead, we'll take you behind investors' growing anxiety as time runs out to raise the debt ceiling. plus, why some now say it's time for the cash-strapped u.s. government to borrow a page from the apple playbook. those details next. stay with us. you're in "the situation room."

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some new talk that maybe the u.s. government should consider borrowing a page from the apple ipad. according to the latest statement from the u.s. treasury department, the country has an operating cash balance right now of about $73.8 billion.

while as of june, the digital giant was worth a whopping $76.2 billion. > let's go to wall street now where the looming crisis is already taking a toll. cnn's mary snow is in new york. she's joining us with this part of the story. mary? >> well, wolf, stocks had their worst week in a year with stocks down 4% for the week. as one trader put it, people are now just crossing their fingers that a deal will be done by monday. >> we are almost out of time. >> reporter: in washington, an impasse. on wall street, growing anxiety. stocks had their worst week in a year. how nervous are people right now? >> they're very concerned. >> reporter: trader alan valdez says while a deal to raise the debt ceiling is expected to happen, there's also the belief that a downgrade of the u.s. credit rating will happen. and he is bracing for what's to come. not far from his memory, the market losses prompted by the collapse of lehman brothers. >> with lehman, it caught us by

shock. but we knew the feds would come in and save the day eventually. right now, there's not that feeling out there. we don't know for sure what's going to happen. >> reporter: one bank took a look at the what-ifs in the worst-case scenario of a first-ever default in u.s. history, even though it doesn't expect it to happen. but if it did, stocks could drop 30% over the next six months according to a credit suisse report. and the economy could shrink by 5% during a period of six months a year. while different scenarios are being. mapped out, behind the scenes, executives from the country's banks met with treasury department officials at the federal reserve in new york. >> these events in washington have gone much further than anybody expected. and so we're all concerned. i mean, that's -- it's not a unique position. they're concerned, we're concerned, everybody's concerned. >> wolf, in a sign of the nervousness, gold, which is considered a safe haven, once

again today reached a record high. >> a lot of nervous people out there. mary, thank you. economists now say if there's no deal on raising the debt limit, the end result will likely be a downgrading of the u.s. credit rating and rising interest rates. that's certainly bad news for the economy and for most americans. but it could present an opportunity for some investor who is buy u.s. debt. cnn's casey wian spoke with the head of the world's largest mutual fund. bill gross of the pacific investment management company. >> wolf, pimco is 3,000 miles away from the debt ceiling debate in washington, d.c.. it manages more than $1 trillion in assets. here on its trading floor, the man in charge is paying very close attention. >> will rogers said way back when that he wasn't so much concerned about the return on his money as the return of his money. and today it's the return of your money that's of primary importance. >> reporter: bill gross took most of the $1.3 trillion pimco manages out of u.s. treasuries months before tuesday's debt crisis deadline. this feels to me like a

politically manufactured crisis, not necessarily an economic one. is that a fair assessment? >> i think it is. president obama said this morning that we have a aaa credit, but not a aaa government. and to a certain extent, that's true. although we suspect that we're not exactly a aaa credit either. but, yes, the government has proved itself to be dysfunctional. >> reporter: he says if the u.s. defaults and suffers a ratings downgrade, he would likely buy u.s. treasuries again, because their interest payments to investors would rise enough to cover the risk. >> it would make them more attractive to us. our assumption would be if the credit was downgraded to a doubaa or a aa plus, basis points would rise, not just for treasuries, but for mortgages and corporate bonds and private credit, credit cards. and that's obviously a problem for the economy. but for an investor, it makes it more attractive. >> reporter: so if you would be spurred to buy treasuries, if there's a quarter percent increase in the interest rate or

perhaps even a half a percent, as some have suggested, i would assume other buyers would come in as well, so where's the crisis? >> the crisis really is in the long-term. 25 basis points or a quarter of a percent is not onerous. to our way of thinking, the u.s. with medicaid and medicare and social security has a $60 trillion liability going forward over the next 20 to 30 years, to the extent that the congress is now addressing the media problem with $1 trillion to $2 trillion worth of cuts. to our way of thinking, they have $58 trillion to go. it's an enormous problem. >> reporter: gross expects a resolution to the debt crisis before tuesday's deadline, but even if that happens, he's very concerned about the long-term implications of the debt on the nation's jobs and economy. wolf? >> casey wian, thanks very much. right now all eyes here in washington on the house of representatives. we're standing by for a critical vote on the gop plan to raise the debt ceiling and it's

expected very, very soon. we'll, of course, bring it to you live. we also expect to hear from the house speaker, john boehner. we expect that he will be speaking as well just before the vote. we'll also talk about why some republicans are wondering if boehner has what it takes to keep republicans in line. ♪ ♪ you are my sunshine ♪ my only sunshine ♪ you makes me happy ♪ when skies are grey ♪ you'll never know, dear ♪ how much i love you ♪ please don't take my sunshine away ♪ [ male announcer ] as long as there are babies, they'll be chevy's to bring them home. ♪ how'd you learn to do that? what'd you use? every project we finish comes with a story built-in. it's how our rough ideas become "you did that yourself?" so when we can save more

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we're only moments away from the vote on the house floor on raising the nation's debt ceiling. this is a procedural vote that's necessary. in advance of that, we expect to be hearing directly from the speaker of the house, john boehner, immediately before the next vote. stay with us for live coverage. we'll go there, of course, once

the speaker starts speaking. meanwhile, other news. a soldier charged in connection with an alleged bomb plot in texas will remain in jail. lisa sylvester is monitoring that and some of the other top stories in "the situation room" right now. what's going on, lisa? >> a judge in texas is ordering that a u.s. army private be held without bond on charges connected to an alleged plot to attack soldiers outside ft. hood. naser jason abdo allegedly told police he planned to bomb a restaurant near the base that's popular with military personnel. at a hearing this morning, abdo reportedly refused to stand when the judge entered the courtroom and then shouted an apparent reference to the 2006 rape of an iraqi girl by u.s. soldiers. it was a solemn day in norway. a memorial for the 77 people killed in two terror attacks last week was held in oslo. speaking at the service, the country's prime minister called it, quote, a vicious attack on all our common values. the service was organized by the youth movement of the labor party, a summer camp organized

by the party's youth movement was the target of one of the attacks. and president obama was joined by auto industry leaders in washington today to announce a proposal for new fuel efficiency standards. the plan would require cars and light trucks sold in the united states to have a combined fuel efficiency average of almost 55 miles per hour by 2025. that's about double the current requirement. the president also took time out from the discussion of fuel efficiency to make a personal request. >> i'm glad that i have a chance to see some of the great cars that you are manufacturing. as some of you may know, it's only a matter of time until p a malia gets her learner's permit, so i'm hoping to see one of those models that gets a top speed of 15 miles an hour, the e ejector seat anytime boys are in the car. so hopefully you guys have some of those in the pipeline.

>> and i guess every parent fears the first time they have to turn over the keys to one of their kids, wolf. >> i can relate. all right. thanks very much. the critical house debt vote only a few moments away, we're now told. we're standing by for live coverage. you'll see it, you'll hear it. you'll also hear directly from the speaker of the house, john boehner. he's going to speak just before the vote. and a key republican presidential contender refusing to stay on the sidelines of this debt debate. just ahead, my interview with the former u.s. ambassador, the former utah governor, john huntsman.

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with only three days left for president obama and congress to solve this grave debt crisis, many of those vying to be the next president of the united states are staying largely on the sidelines while other gop presidential contenders say now, now is the time to speak up. and joining us now, republican presidential candidate john huntsman, the former governor of utah, the former u.s. ambassador to china. governor, thanks very much for coming in. >> thank you, wolf. delighted to be here. >> let's imagine you're president of the united states right now. you have a divided republican caucus in the house of representatives, a senate majority, a democratic majority in the senate, and you're president and you've got three, four days before the debt ceiling runs out. what do you do? >> use the bully pulpit in ways that speak to clear, cut, and

defined goals that the people of this country want to achieve. they want cuts. there's a cancer growing in this country and it's called debt. and everybody knows it and some people are trying to hide from it. so first and foremost, there's got to be serious cuts associated with whatever we do with the debt ceiling. second, we have to be very clear about meeting our obligations as a country. we're 25% of the world's gdp, the most significant financial services country in the world. and the eyes of the world are on us as well. use the bully pulpit for things other than dnc talking points. use the bully pulpit to get very specific about where you want to take this debate. and then you've got to work both houses of congress. >> so if it comes down to this issue, three, four days before the debt ceiling runs out, a second vote some time next year, early next year, in the middle of presidential elections, campaigns, all of that, or a longer raising of the debt ceiling, so you don't have to deal with this crisis again in the middle of 2012. you letter it continue on until

2013, what do you do, if that's the final issue that could avert default? >> well, as president, i would look at the plans and the dialogue is nobody seems to have a plan. there's a boehner plan, which i like, and that takes care of our immediate needs. it then pushes into next year some very important aspects -- >> but the white house says that's dead on arrival? >> that's totally political. the fact that they're trying to push it out beyond 2012 is totally political. >> it's not totally political, because if the country has to go through a wrenching debate like this again next year, the credit agencies, they're all watching. >> but this is the most important issue of our time. it's the cancer i referred to earlier that is metastasizing in this country. it needs to be radiated and excised and cut out. and the only way we're going to get there is by the people of this country speaking out in specific terms about how deep, and what our priorities and size and role of government ought to be going forward. having that part of the 2012

election cycle i think is a very healthy thing for this country. >> even now right at this critical moment with the whole world watching, the aaa rating of the united states could go down, if it's aa, interest rates could go up. that would be a hidden tax, in effect, for almost all americans. >> maintain the aaa status. i come from a state, one of very few, where we maintained our aaa status. that was very important to the people of our state, because it controlled the cost of capital. you first and foremost have to address your obligations. second, i think we push a lot of this debate into next year and make this part of the presidential debate. >> you want this debate to continue next year, including letting the debt ceiling hang over this entire election? >> absolutely. i think that's not a bad people at all for the people to be part of continuing a deliberation about the most important policy issue of our time. >> you wrote a letter to the president and called him a remarkable leader. do you think right now he's still a remarkable leader? >> he put a republican in his administration, i thought that was pretty remarkable. he was getting off in the early days of his administration,

which is when i wrote that note. i was raised to be gracious and raised to write thank you notes. so that's what i said back then. there is no leadership today. times have changed over the last couple of years, and i've got to say, the one thing that is missing in this debate is presidential leadership. using the bully pulpit, using the weight and the power of the presidency to define in specific terms where this whole debt ceiling issue goes, that's one of the reasons we're in this fix. we're 25% of the world's gdp, the most powerful financial services sector in the world right here in the united states. and the fact that we've let it come down to the 11th hour i think is evidence of lack of leadership. >> he has used the bully pulpit. he's giving addresses to the nation, he's going out on television almost every day. he is using the bully pulpit. >> they're broad, generic, ill-defined talking points. i don't think specifics, i don't see anything on paper that he's sharing with congress or the american people. this is a time to get serious. >> michele bachmann says the country does not need to raise the debt ceiling right now. do you think she understands

what's going on? >> she's an elected representative. she has her point of view. i would only say that we have an obligation neto meet as a natio. we've had a aaa bond status for almost 100 years in this country. it impacts the cost of capital, which means it impacts every family in this country. and i say it's important that we step up and meet those obligations. >> you disagree with her on this issue. you believe the nation needs to raise the debt ceiling. so he's wrong from your position? >> in exchange for cuts. we've got to cut in a way that's commensurate with however you're going to raise the debt ceiling. >> are you also insisting on a balanced budget amendment to the constitution? >> that's going to be the most important debate we have next year. >> do you believe there needs to be a balanced budget amendment? >> as a governor, i had a balanced budget amendment. >> but as president? >> absolutely. in the next year or two, for our country to be having that discussion, it's extremely important. i think it's the will of the people. >> use this opportunity to address michele bachmann and tell her why she's wrong .

>> i think i just did. the country has had a aaa bond rating for over 100 years. it increases on every family in america, not a wise thing to be doing right now. saying nothing of our credibility in terms of the financial marketplace. >> president obama's political adviser, david axelrod, recently tweeted this about mitt romney, arguably the front-runner for the republican nomination right now, suggesting he's mia in this whole debate. "anyone heard from mitt romney lately? where is he on the mcconnell plan, on the debt talks, on the impact of a default? why so quiet?" all right, is david axelrod right? >> well, he's a political consultant. all i would say is this is a time for people to stand up and show real leadership. if somebody wants to be president of the united states, this is a time to stand up and actually lead out on one of the most important issues of our time. if you're not willing to lead out during a time of this debt ceiling debate, that should raise some questions about when you are, in fact, going to take a position and lead out.

>> and mitt romney's not standing up and taking a leadership role? >> i see no evidence in any of my opponents stepping up and taking a position on it. >> any of them? >> i haven't seen -- it's one thing to wish the whole debate away and just say we'll crash and burn. i don't consider that to be a position. >> you don't like grover norquist's no new tax pledge. you have refused to sign that, right? >> i have refused every pledge. i pledge allegiance to my country. i have a pledge to my wife. but beyond that, i don't do pledges. i don't think it's fair to tie somebody up once they do get elected in ways where they can't properly serve the people who got them there in the first place. so i started out as governor in the very first place saying, look at what i do. actions ought to speak louder than anything else. we had record tax cuts. i resigned to sign the no new tax pledge. we never raised taxes. we cut historically. i don't need to sign things in order to prove a point. actions should speak a whole lot

larger than pledges. >> but would you say you have no intention no raise taxes? >> not going to raise -- >> more of the interview next week. but here's john boehner, the speaker of the house. >> -- and they're worried about the mountain of debt that's facing them and their children. today we have a chance to end this the debt limit crisis. with this bill, i think we're keeping our promise to the american people that we will cut spending by more than the increase in the debt limit. the congressional budget office has certified this common sense standard and it's been backed by more than 150 distinguished economists from across the country. we're also imposing caps to restrain future spending so that we can stop the expansion of government while giving our economy a chance to grow and to create jobs. and we're advancing the great cause of a balanced budget amendment to the constitution.

what this bill now says is that before the president can request an additional increase in the debt limit, two things have to happen a joint committee of the congress must produce a spending cuts larger than the increase in the debt limit and both houses of the congress must send to the states a balanced budget amendment. listen, a balanced budget amendment, it is a -- it's time for this to happen. it enjoys support in both houses of this congress and it enjoys bipartisan and widespread support across our country. the bill also ends this crisis without raising taxes, which would cripple our economy and there's no gimmicks. there's no smoke screens here that represent the old ways of doing things. now, the bill before us still isn't perfect. no member would argue that it

is. it's imperfect because it reflects an honest and sincere effort to end this crisis by sending a bill over to the senate that at one time was agreed to by the bipartisan leadership of the united states senate. and to my colleagues in the senate, if they were here, i would say this. if this bill passes, this house has sent you not one, but two different bills to cut spending by trillions of dollars over the next decade, while providing an immediate increase in the debt ceiling. and to the american people i would say, we've tried our level best. we've done everything we can to find a common sense solution that could pass both houses of congress and end this crisis. we've tried to do the right thing by our country, but some people continue to say no. my colleagues, i have worked since the first week of this session when we were sworn in in

january to avoid being where we are right this moment. two days after we were sworn in, the treasury secretary sent us a letter, asking us to increase the debt ceiling. i immediately responded by saying we would not increase the debt ceiling without serious cuts in spending and serious reforms to the way we spend the people's money. we passed a budget. the other body has spent over 800 days and still no budget, no plan. this will be the second bill we sent over to the senate, and yet, still not one piece of legislation out of the senate has passed that deals with this crisis. and my colleagues, i the yellow th can tell you that i worked with the president and the administration since the

beginning of this year to avoid being in this spot. i have offered ideas, i have negotiated. not one time, not one time did the administration ever put any plan on the table. all they would do was criticize what i put out there. i stuck my neck out a mile to try to get an agreement with the president of the united states -- i stuck my neck out a mile. i put revenues on the table. in order to try to come to an agreement to avert us being where we are. but a lot of people in this town can never say yes. a lot of people can never say yes. this house has acted. and it is time for the administration and time for our colleagues across the aisle, put something on the table! tell us where you are!

and yes, people can be critical of what we've done, but where are the other ideas? at this point in time, the house the going to act and we're going to act again. but it is time for our colleagues across the aisle to tell us what they're for. tell us how we can end this crisis. you know, obama has been quoted throughout the debate in the last few weeks. and ronald reagan would probably be flattered if he were here. but ronald reagan had on his desk a little placard, and that little placard was real simple. it says, "it can be done." i have a replica of that placard on my desk. and let me tell you, members of this house, it can be done. it must be done and it will be

done if we have the courage to do the right thing. so for the sake of our economy, for the sake of our future, i'm going to ask each of you, as representatives of the people of the united states, to support this bill, to support this process, and end this crisis now. >> all right. so there you see the speaker of the house. he's animated, he's upset, understandably so. this is a critical, critical moment of what's going on. he made his points of what's going on. let's bring in our strategy specialist and gloria borger, our chief political analyst. let me bring you in, gloria. he makes some clear points. there's been no plans on paper that the obama administration has put forward and no legislation put forward by the democrats who control the senate. those are fair points. >> that's why the speaker felt that it was so important for

republicans to go on the record. if they could not pass his proposal, then the democrats in the senate would feel that they had the wind at their back and would say, you know, you want to filibuster the debt ceiling, go ahead and do it. vote against us. so i think this is very important for the republicans here to lay down their marker. and then they can say, we tried to stop default. >> why haven't the democrats, including the president, actually put some actual proposal with numbers on the table that could be considered or scored by the congressional budget office. >> first of all, mr. reid did that, and we know what the actual score is, because the cbo came back and said -- >> why didn't the president do it? >> well, the president of the united states with the vice president put $2.5 trillion in cuts -- >> but he didn't put any piece of paper out there. he just talked about it. >> because it was a point of negotiations between the two parties. but, wolf, we can't to figure out ways for mr. boehner to save

face. he's trying to save face right now because of the failure and tin effectual whipping they did last night. this approach that he's taken is a -- it's a very narrowly partisan approach that will not get us to monday or tuesday to raise the debt ceiling. what we need is a bipartisan approach and what we need is a balanced approach. we know wie will not get a balanced approach as far as tax revenues, but we know that there are cuts on the table from both sides. >> he's going to get this legislation passed right now. he's got enough to get over 216, which is what he needs. the vote is going to take place right now. he did leave open at the very end, you know what, come back, talk to me, bring me something so we can continue this conversation. did he leave you, tony blankley, with hope that this can be worked out before tuesday? >> look, i think eventually this town is going to get to some kind of conclusion. >> what does that mean? eventually? >> i don't know. i hope by the 2nd, maybe not.

but i think a lot of people misunderstood. when they say that the republicans are looking for a fig leaf or a vote that they voted on that doesn't result in anything, i think they misjudge where the passion of the house republicans are. i think they came to town to try to get a job done, which is to reduce the debt and deficit, and they're not going to be easily rolled. i don't know how this plays out, but i think negotiations after this passes between leader reid and speaker boehner are going to be very tough. i don't know who blinks. >> hold on, guys. i want to continue this. he says another vote is necessarily within a few months. he says there has to be a vote approving a balanced budget amendment to the constitution. to points that the president says are no starters that he will veto. and we will see what happens. stay with us for a moment. we're waiting for that critical vote in the house of representatives on the republican plan to raise the debt ceiling. when it happens, we'll bring it to you live. stay with us. ♪

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all right. moody's has just come out with its latest report on the potential of downgrading america's aaa credit rating, which has been in business now for more than 70 years, almost 100 years, i should say. let me read specifically what they say, because they're readt they say because they are precise. they say after the prolonged debt ceiling deliberations have increased the possibility of a rating change or outlook change or both for the aaa bond rating. they say this. nevertheless, it remains our expectation that the government will continue with timely debt service and that our review for downgrade will more likely than not conclude with a confirmation of the aaa reading albeit with a shift to a negative outlook. if there were a default on a treasury debt obligation a downgrade would likely follow even if the default was swiftly cured and investors suffered no

permanent losses. it looks like this is a very timely announcement from moody's. standard & poor's has their own credit analysis of the u.s. government but they are saying they are putting pressure right now on members of congress. you guys got to make sure you pay all of the u.s. obligations otherwise the aaa rating will go down. >> and on the treasury. there can't be a default. we can't let there be a default. the question of a aaa relating relates to whether our debt to gdp numbers are right and in that sense the credit agencies will only confirm the judgment of the markets rather than make the judgments of the markets. we're not quite there yet. they make the good point that we can't possibly let there be a default. >> this will put pressure on the democrats and the republicans to get this deal done. >> of course. but unless i'm mistaken they did talk about a to me

there's a question about no matter what the senate and house do, is there enough deficit reduction in that to in the long-term avoid a downgrade and i'm not so sure we know the answer to that right now. >> even $4 trillion is considered only a down payment because we'll run up 10 trillion over the next ten years. >> they may say neither plan cuts it. >> especially the plan with a two-step process. if they don't have the political will to make the tough decisions today, what will bring them to their senses in six months? >> the reason we need the leverage of another vote next spring is to get the public attention on the entitlement reform. there's no entitlement reform in anyone's budget in this one but we need entitlement reform and to have vote without engagement between the two sides, president and republicans, in the spring it will go by and we'll get to the end of the year without it. >> entitlement reform without

tax reform -- >> both of them. that's what you need six months for. you can't write entitlement reform in 24 hours. even with a president and congress we have, we can solve the problem. >> here's my question. if you set up some kind of a commission, how do you ensure that the commission doesn't stalemate itself. republicans can appoint no tax people to it. it could be deadlocked. >> that's the danger of a commission. if you use regular committees, it reflects in both parties the will -- >> how can you ensure and that's a problem. because then you're back where we are today. >> how many presidential commissions have there been that have studied this and all those recommendations have been thrown away. >> that's the danger. if you don't use a regular committee that reflects the opinion of the country and the congress, unless you select that committee very well balanced to reflect all opinions, you have something that won't come into play. >> if we're going to come back

in six months, why not have a clean debt bill. we gave president bush 10. we gave president reagan 17. let's have a clean debt bill and come back in six months to rehash this. >> the republicans won't accept that. that's why. >> they don't want the senate to also issue their plan. >> democrats control the senate and have their ideas. it takes two to tango. stand by. we'll take a quick break. more of the breaking news we're getting ready for the actual vote because the speaker delivered his remarks we expect that this language will pass, this legislation. we'll see. stand by. [ male announcer ] megared omega-3 krill oil from schiff. unlike fish oil, megared softgels are small and easy to swallow with no fishy smell or aftertaste. try megared today.

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[ male announcer ] in here, everyone speaks the same language. ♪ in here, forklifts drive themselves. no, he doesn't have it. yeah, we'll look on that. [ male announcer ] in here, friends leave you messages written in the air. that's it right there. [ male announcer ] it's the at&t network. and what's possible in here is almost impossible to say. we're watching what's happening on the floor of the house of representatives right now. this is what they call a motion to recommit with instructions. it's a procedural vote. it's not the real vote on whether or not john boehner's legislation to raise the debt ceiling passes or fails. that will still come up. this is a technical move right

now. explain this procedural vote to our viewers and what it means. the big vote still to come. >> wolf, they have something in the rules committee that allows members of congress to basically strike the last word if there's ame amendments and stuff that must go to it. this is a procedural vote. >> you used to work for the speaker of the house when he was newt gingrich. >> the motion is the minority party's shot at an alternative. it will be defeated by the majority. >> it's been really intense over these past 24 hours. it looked very gloomy for the speaker, john boehner. all of a sudden they sweetened the pot for the tea party supporters, freshman republicans, and now it looks like he's going to get this language passed. >> a guaranteed vote on the balanced budget amendment. i think that the speaker of the

house would not even be bringing this up if he were not absolutely sure that he did not have the votes to pass it which is why he didn't bring it up yesterday. what's interesting about this is we watched for hours last night. people going in and out of his office. pizza being delivered and all the rest. what's interesting is that in the old days speakers used to be able to say here's a little pork, here's an earmark or two. i can twist your arm this way or that way. this was all about substance, ideology, how we can get to entitlement cuts. you know, this was not about sort of petty. this was about big picture, how we get to where you want to be because the 87 freshmen members of the house see themselves as a transformational caucus. >> do you think he's going to survive this in the long run? >> he's played a very difficult hand that he's had all year very

shrewdly. similar problem to what we had with newt. a freshmen class that came here to get a job done and he had to persuade them on how to maneuver through it was reliable and that's what speaker boehner is doing. we can't get from point a to b going this path i'm suggesting is the argument he's won for the pi time being. >> stay tuned because we're following the breaking news. >> you're in "the situation room." happening now, the breaking news, delayed for 24 hours amid a struggle for support, the house republican debt plan is now heading to a vote within the next few minutes with america heading toward potential default the last chance for a solution may lie in the senate. i'll speak with republican senator rand paul and democratic senator brown.

democrati democrats are flexing their muscles but that could backfire. president obama has the bully pulpit but does he need to be more of a bully when dealing with congress. we want to welcome our viewers in the united states and around the world. breaking news. political headlines all straight ahead. i'm wolf blitzer. you're in "the situation room." after a 24-hour delay, a frantic search for support and new language catering to conservatives. the house speaker john boehner is finally taking his debt plan to the floor for a vote. listen to this. >> i stuck my neck out a mile to try to get an agreement with the president of the united states. i stuck my neck out a mile. i put revenues on the table in

order to try to come to an agreement to avert us being where we are. a lot of people in this town can never say yes. a lot of people can never say yes. this house has acted. it is time for the administration and time for our colleagues across the aisle to put something on the table. tell us where you are. [ applause ] yes, people can be critical of what we've done but where are the other ideas? at this point in time the house is going to act and we're going to act again. it is time for our colleagues across the aisle to tell us what they're for and how we can end

this crisis. >> president obama warned today that the republican bill in his words has no chance of becoming law and that the action may soon shift to the senate. time clearly is running out with america only days away from default. stock markets plunged once again today here in the united states. many americans are getting very nervous. let's go straight to our congressional correspondent, kate bolduan, standing by with the latest. we're getting ready for the final vote. we anticipate the speaker has 216 necessary for passage. is that right, kate? >> reporter: we expect that. the leadership is not predicting certain victory right now. members that we've talked to say that they have the votes. where we are this evening is right off the house floor where we are watching the televisions and we're watching to hear when they approaching this vote. they are coming up near to the time where they will start voting on this. a vote that's become much more dramatic since yesterday evening when they had to abruptly pull

the bill from the floor and spend hours trying to twist arms and garner more support around house speaker john boehner's bill to raise the federal debt ceiling. the breakthrough seemed to come early this morning in a closed door meeting of house republicans. republican members emerged and no votes started to become yeses and what changed was the leaders changed the bill. they changed part of the bill having to do with the second debt ceiling extension that would happen early next year. that debt ceiling extension according to this new language is now contingent upon passage by congress of a balanced budget amendme amendment. the original bill called for a vote on the amendment and now it calls for congressional passage. this comes as a result of all of the pushback they were receiving from house conservatives who were not happy saying the bill did not go far enough and did not have enough deficit reduction measures in it so this seemed to sweeten the pot enough to get enough members they think on board but we'll see very shortly as we're watching the clock tick down and we're

watching for this vote to take place. wolf? >> they are voting now in a procedural vote that the democrats have put forward. a vote that already is defeated. 216 republicans voting against this procedural motion. the democrats will lose on this. there's only three minutes left and then, kate, they will have the final vote on john boehner's actual legislation that would have this two tiered proposal for raising the nation's debt ceiling and having a second vote early next year that would also include an amendment to the u.s. constitution that would require the federal government to have a balanced budget, is that right? >> that's absolutely right. and then of course the question for everyone at home is what's next? and the real reality here that people up here will have to deal with soon is with senator majority leader harry reid saying this bill is dead on arrival in the senate. once this step is passed, then the real negotiations in the senate and then between the senate and the house are going to begin because they're going

to have to find a way some way to thread the needle enough to find a package that can please the house, can please the senate and make it to the president's desk. >> two minutes left on this vote and then the real vote will come up on the substance of the legislation. kate, we'll check back with you. let's check in with senator rand paul from kentucky. he's a tea party leader in the united states senate. assuming, senator paul, that this passes, boehner's legislation passes the house right now we believe it will. it will then come to the senate where harry reid, the majority leader, says it is dead on arrival. what do you do to avert disaster economic disaster come tuesday? >> the first thing you ought to do is the president should take default off the table. i've been saying for weeks now the president is acting irresponsibly by even insinuating there could be default. we have plenty of tax revenue to pay the interest on the debt and pay our social security checks and to pay for our soldiers'

salaries. we don't have enough to pay for all of government but there in lies the problem. about 30% of government is overdrawn. we're borrowing from china and that's really the discussion we're having. >> if the u.s. government can't pay its bills to government contractors, to vendors out there, whether from the department of education or the department of health and human services or the department of interior, that's going to send a signal to the credit rating agencies that the united states can't pay its bills. how worried are you that america's aaa rating would then go down? >> i am worried about our aaa rating going down. i think it goes down regardless of whether we raise the debt ceiling by august 2nd. we'll be downgraded because what we're proposing to do is not adequate. the proposals from republicans and democrats never balance. they both will add 7 trillion to $8 trillion and they will be raising the caps that were previously set in the house. we already have caps set in the

house. this bill is going to raise the caps that are currently abiding by. >> would you vote for boehner's legislation if in fact it were to come up for a vote in the senate? >> it's gotten better because they've attached the balance budget amendment passing but only with the second set of debt. it's gotten closer to the original bill which we already passed with 234 votes, which included some democrats, which was cut, cap and balance. i'm a little bit -- i don't quite understand why we're passing a second piece of legislation because harry reid says he wouldn't touch cut, cap and balance and he's not going to touch this one either so i've kind of been wondering why the fuss over this bill because it has as much chance of passing as cut, cap and balance did. >> tabled 53-47 vote along party lines. this one probably will be tabled as well. so what do you do if you are a leader in the united states senate and you got this problem here? >> well, i think ultimately they

will raise the debt ceiling. i think the two sides will come together. the reason i won't support either of those plans though is because they will add too much debt to the country. i think we should freeze spending or actually i'm for the penny plan which would cut it by 1%. i think the american people realize that it would be reasonable to cut one penny out of every federal dollar that we spend. i see that as imminently reasonable. that's what we need a debate over. not some false plan that will not ever balance the budget. >> you know, the dow jones this week in the united states suffered its worst week. six consecutive losses in more than a year. how worried are you that your constituents, your constituents in kentucky, 401(k)s, life savings, they could lose a lot of money if interest rates go up and stock market continues to go down. they just started voting on the

legislation in the house of representatives. we'll keep it up on the screen for our viewers. 14 minutes left to go. >> here's what i would say is that i am concerned about my savings, my family's savings, my constituents' savings, you know why the dow jones went down this week? because the economy is in the pits. we're not growing. we're not creating jobs. it's an economic slump. it's an economic recession worse than any recession since the great depression and this president has done nothing but make it worse since he came into power. that's why the stock market is slumping. it has nothing to do with august 2nd. the debt ceiling will go up. still we'll be in this malaise that the president doesn't seem to have the capability of getting us out of. >> if america's aaa rating goes down and if the interest rates go up, that's going to be a further strain on this very fragile economic recovery if we can call it a recovery. >> the thing is the rating agencies are telling us they may downgrade it not because the debt ceiling is not going up because the debt ceiling is

going to go up, they may still downgrade us because it's inadequate what we're doing to fix the problem. that we're not showing any signs that we are going to get us out of this fiscal mess where we keep adding trillions of dollars of debt every year. >> we're looking at the vote right now. you see the republicans now have 171 in favor. 174 opposed. looking at the tally. they need 216 votes in order to get this done. you know, as i look at this vote, senator paul, and i remember what your father, congressman ron paul of texas, has said over the years, did you expect to see something like this unfold in your first year in the united states senate? >> no. it's been an unusual vote. in the past congress has been a rubber stamp usually for borrowing. good points have been made and good history has been reiterated. they raised it 18 times under reagan. it shows that we've been fisc

fiscally responsible to republican administration and democrat administration. our fiscal problems are bipartisan. we can't just keep raising the debt ceiling. that's why i was for drawing a line in the sand here. i think they'll raise the debt ceiling but my fear is we won't get significant enough reform they may downgrade our debt even if we raise the debt ceiling. >> 190 votes right now in favor of speaker boehner's legislation. the magic number is 216. we're watching it very, very closely. 216. senator paul, thanks very much for joining us. >> thank you, wolf. >> let's bring in john king. he's on capitol hill watching this unfold. dramatic 193 to 190 right now. i assume the speaker managed to get guarantees of 216 votes otherwise he would not have allowed this vote to even happen. >> we have to assume that, wolf,

as we watch the former numbers come on. the vote was scheduled on wednesday. he postponed it. he was publicly humiliated yesterday. you can't call it anything but. he was walking along the halls with a public event saying the house will pass this measure and then pulled it from the floor before midnight because he couldn't round up the votes. you have to assume the speaker triple checked his math today as we watch this go forward. your conversation with senator paul is a fascinating snapshot of the big question. where do we go next. let's assume in a moment or two the house will pass this plan. we know the president says he would never sign it. we already know it is most unlikely to escape the senate and by tonight or tomorrow could be voted down in the senate. the question, wolf, after we go through the rituals. house republicans plant their flag right now and senate democrats plant their flag, when will the real negotiations begin? many people will tell you they can see the broad outlines of a deal. it's somewhere in the numbers around the reid plan. $2.5 trillion. you get cuts. you do it one time.

not two like house republicans do and you can have cap in that plan and triggers for additional cuts in that plan if say the savings would come from iraq and afghanistan and don't materialize and votes on a balanced budget amendment but what the democrats reviews to do is tie an increase in the debt ceiling to passing the balanced budget amendment. you can see the rough outlines of a deal. any deal would have to go back to the house. would these conservatives especially tea party members that speaker boehner had to make concessions to, what would they do if it comes back monday night just hours before the deadline, would they vote for that? >> 201 votes in favor of this legislation. right now 196. take a look. as of now 12 republicans have bolted from the leadership from john boehner, the speaker, and eric cantor the majority leader and right now 12 republicans have voted against and still not there. 216. there is still plenty of time left. nine minutes plus for this vote

to conclude. it's a fascinating development as you say. by the way, we're told john boehner was mulling around and didn't seem overly concerned but it is still not a done deal yet. once this does pass, john, assuming it passes, gets 216 votes necessary, it will go to the senate as we know. the senate could consider it or do what they did with cut, cap and balance legislation and table it. >> we heard from speaker reid's office. he has several options. he can push this aside and bring up his own plan and not bring up the house plan but the democrats are determined to make a point. unless senator reid has a last-minute change of heart, his attention is to bring it to the floor and vote to kill it. he can do that with 51 votes. enough democratic and two independent senators signed a letter saying they wouldn't vote for the house republican plan. in their view it's been tweaked to make it worse because it requires passing the balanced budget amendment before you get

the second installment of the debt ceiling increase. there's no question on this night harry reid has votes to kill this plan and we've heard from a number of democrats that they want to do just that and dop it pretty quickly to make the political point to the house of representatives to say you passed your plan, guess what? it's dead. we killed it in the senate. president wouldn't sign it any way. now it's time to have a real conversation about what to do. this is playing out. that's why the white house doesn't like this plan. they don't like the revised plan even more. they would like this vote on wednesday or thursday because everyone will need to get in a room to figure out a compromise and closer we get to monday night and tuesday morning, the more dicey everything gets. >> 207 votes in favor of boehner's legislation. 200 opposed. kate bolduan is on the hill. fascinating number here. 19 republicans still have not voted. seven democrats have still not voted. so they still need up to 216. they are at 208.

a little ways to go. >> a little ways to go. as we always say, you can never call the vote until the last vote is counted because members can switch and change their mind while time is still on the clock. throughout these discussions as we were heading toward this vote even yesterday, everyone knew that if the democrats could pull off what they wanted, which was unanimous opposition to house speaker john boehner's bill, boehner's margin of error was going to be thin. he could only lose a couple dozen votes if he was going to be able to do this with only republican support. we have 216 is the magic number. of course that's the way it works in the house as you well know. it's the majority of all members present and voting. they need to be in the chamber and voting and majority of people in the chamber. we're watching that. i tell you, a good moment just now house speaker john boehner walked past. he has a long standing policy of not talking to reporters in the hallways.

i yelled, speaker boehner, are you confident? all he gave me was a thumbs up. read into that what you will. >> 15 republicans have still not voted. i suspect some of them are waiting to see if they get over 216 so they can vote no and not undermine the speaker of the house. some want to wait until the very last moment. this is very, very difficult vote for some of those especially those freshman tea party activists who don't necessarily like this vote but may in the end have no choice but to help the speaker get over 216. gloria, they are getting close. they need five more. i suspect they'll get it. there's just under six minutes left to go. five minutes plus before the clock winds down. >> yeah. i think you're right. there are going to be these holdouts who just have probably told the speaker we'll be there if you need us absolutely but we would rather vote against it. you're just seeing the people kind of hanging back waiting to see if the speaker needs them.

i don't think the speaker would have given kate a thumb's up unless he knew he had those votes in his pocket. it's nice going into a vote like this knowing you have a few extra votes to pad with and i think that's probably what's going on here. it does give you an indication, wolf, of how difficult a job speaker boehner had. this was not easy for him. this was not like he had had things to give to these people. here's an earmark here and earmark there. he had to talk them into doing this so that republicans could go on the record and say, yes, we voted for something that would lead to a lifting of the debt ceiling and we are responsible. i think that was probably the argument that he had to use over and over and over again. we had to go on the record as house republicans. >> 213. they need 216. they need three more. 11 republicans still have not voted. five democrats interestingly

have still not voted either. so far no democrats have voted in favor of speaker boehner's legislation to raise the nation's debt ceiling. i suspect some of them may be very conservative democrats. there aren't a lot of them left in the united states house of representatives right now. >> there are about five. >> it's interesting they haven't voted yet either. 214. they need two more. i want to caution even if they reach that 216 number if there's time remaining on the clock and you can see time remaining right now just over four minutes, they can still change their mind. they are allowed to change their mind. jessica yellin is over at the white house. our chief white house correspondent. they must be watching this closely at the white house even though the president said this is really a waste of time because it won't go anywhere in the senate and he would veto it. by the way, let me hold off. there it is. 218. they now have more than 216 so unless someone decides in the next three plus minutes to

change their mind, this is passed. the speaker managed to get his legislation through the house of representatives. legislation that will now go to the united states senate where the senate majority leader harry reid says it's not going anywhere so negotiations will resume. now that this has passed the house of representatives. you can see 218 votes right there, i assume the president of the united states will get more actively directly involved in talking to the democratic and republican leadership. he only has a few days left before the deadline occurs. >> the white house has made it clear he could call leadership here to the white house but they also made it clear that they think this is the hill's problem in a sense and that they have to solve this issue because they tried and tried again to broker some kind of compromise and time after time it's broken down. the white house has also made it clear that at some point this is just an obstacle. the boehner bill has been an obstacle to progress and the

president said as much today. this won't get majority of any of the senate. let's get past it and move on and in a way i suspect they'll find this a relief. it's over. they didn't want it. it's done. and they will be relieved that they can be past them and move on. that's my word and not their's. the focus is can a deal be brokered in the senate. >> john king, it's a huge relief i'm sure for the speaker of the house, john boehner, but to a certain degree the white house, the democrats, they need a strong speaker right now who can deliver enough republican votes in the house of representatives if they are eventually over the next three days or so there's going to be a final deal that allows the nation's debt ceiling to go up. >> you look at this dramatic moment and yes, the speaker will get victory tonight. the question is at what price. he changed the bill that makes it even more unacceptable to democrats in the senate and unacceptable to the democratic president and the speaker by twice having to delay the vote has been weakened.

can he rebound? we'll see in the days ahead. look at public opinion polling largely because of the state of the economy the president's standing is down as well. at a time when the country needs leadership and the two most important people here are the president of the united states and speaker of the house, both of them are weak and at a time the country needs two strong leaders to find a way to get through this difficult differences. a lot of people at home wonder why does washington have to work this way. i was in communication with a top senate aide. everyone says they see the broad outlines of how this could or should turn out, why aren't they talking about it as these votes play out? first the house will vote and then leader reid in the senate will put the democratic strategy in place after votes in the senate will perhaps the vice president come up and the president get involved and ds start talking to rs about what is possible before monday night. people at home would think if

they know two plans are unacceptable, why not start working on that now? we're caught up in the rituals of washington and the clock is ticking. >> 218 is where it stands. 30 seconds left remaining in this vote. we'll hear the official announcement once the time runs out. it goes to the senate. there will be votes in the senate as you points out. in the end if there's going to be a deal, i suspect moderate democrats will have to align with moderate republicans and get it passed. >> the speaker of the house has to bring it to the floor. that's one of the republicans. if you negotiated this deal in the center, you could get it done probably tomorrow if not a week or two ago. the problem is speaker of the house and majority leader in the senate have power about what comes to the floor. are they going to stop something to come to the floor? probably not. they will want to be in the negotiations. >> hold on. hold on. >> the unfinished business is question on suspending rules.

>> it's official. it passes. the house passes john boehner's republican plan to raise the nation's debt ceiling and historic moment right now but as we say and let me bring gloria borger back into this conversation, the democrats in senate including harry reid say never mind. it's not going anywhere. >> they are going to table it. they could possibly use this as a vehicle to put their own measure on and get that done sooner. i think as john was pointing out, there's a bit going on here because each house has to kind of work its will and you have the leaders who want to get down to negotiations but they couldn't negotiate while these bills were pending. if you are senator mcconnell, republican leader of the senate, you won't be really negotiating behind closed doors when you are supporting john boehner's bill. you have to let that kind of

work its way. i was told by somebody close to mcconnell that there have been talks but no negotiations. now, in washington that makes a difference. they really couldn't negotiate until this got done. as jessica was saying earlier, the white house is probably happy to get this over with and have it move to the senate and then be able to speed up some action. >> they are doing other procedural votes right now. but the major vote has occurred. it has passed the house of representatives. kate bolduan is our congressional correspondent. kate, you've got some of the color, if you will, of some of the drama as it unfolded on the floor of the house. >> from my colleagues in the house chamber coming in and out and we'll see some members walking past us as they are leaving the chamber. my colleague tells me that members were watching with high interest the vote board that's kind of above on the wall and it kind of keeps the tally of where

the votes stand and you can see as things tick off and change and that a hush came over the crowd, if you will. it came over the chamber when they passed that threshold of 216. as we know, that held and it passed and they were able to squeak it by with 218 votes is where it fell. high interest in the vote as you can see. many people walking out now and of course the question lends to what's next and all eyes are now turning on the other side of the capitol behind me to the senate. >> you'll be over there pretty soon. stand by. i want to go to the democratic senator from ohio joining us live right now. senator, what's going to happen now that the house of representatives has passed this legislation. it's your turn next. what happens? >> well, most people realize the house's action was a bit of a waste of time because it's a political statement to get members on board. they were able after three days

to do that the senate will vote to reject that. mitch mcconnell and harry reid will work out something bipartisan that will make sure we don't default, something that our country has never done through presidents of both parties with much more cooperation than this, but we'll do that. we'll deal with the budget deficit. we'll begin paying down or we'll work obviously to move towards a balanced budget and then we can go back to really focusing on jobs which is what we ought to be doing. people in my state are hurting. they can't believe this kind of game playing in the house of representatives. they want to see us come together and put our efforts into job creation making sure we enforce trade agreements, infrastructure, bank, help small businesses, all those things. >> republicans in the house want a second vote early next year on balanced budget amendment if the debt ceiling is going to be further raised to allow this to go forward. is there any way you can accept a balanced budget amendment to

the constitution so the country never has to have deficit spending again? >> i support a balanced budget amendment a dozen years ago when i was a member of the house. in those days we got to balance budget because we did the hard work and not just send out news release kind of work. i could support a balanced budget if it really was shared sacrifice but they want to set it up another way. put that aside. if they are just asking to keep us out of default, to vote on balanced budget amendment, i think that all of us in the house and both parties in the senate say let's do that. we'll get to an agreement in the senate and we'll do what we need to do. we need to get -- there's just when i look at what the house did, they want to go through this again in six months. i don't know a business person from toledo to dayton to youngstown to akron, ohio, that think that it makes any sense for our country to go through this again in six months.

it just freezes any kind of activity or investment or job creation when you do this. it injects more uncertainty into an already uncertain economy in going through this again in six months would be just such an irresponsible thing to do. i don't think -- i think senators understand that. i'm not sure why john boehner's troops in the house think that it makes sense to do this again in six months. >> in terms of the senate action, it's now friday night, what happens tomorrow, sunday, monday, how quickly does this go through the process in order to avert an economic disaster on tuesday? >> we're working late into the night tonight. late into the night tomorrow night. we'll be hear sunday and i think the timetable is such with the way senate rules work that unless we get unanimous support or what's called unanimous consent, wolf, to send it to the house monday morning. we would like to do it earlier. i think the house then will get a lot of pressure from main

street, from their business community, saying you don't want to go into default. you're not going to vote to go into default, right? don't want to put us through this in six months. we're doing this in the right way. i think that this is the right thing for the united states of america not to put this blot on our international reputation and hurt the value of the dollar and reputation of our country and cause interest rates to go up. i can't imagine in the end that for an ideological check in the box that republicans in the house of representatives will do that. i think the senate will do this right. i think the house will follow. >> you're confident, senator brown, that harry reid, the democratic leader, and mitch mcconnell, the republican leader, they will both forge something they support and will pass the senate? >> i'm confident for a lot of reasons. the most reason i ran in the hallway earlier and ran into a

republican senator who's been here for a while from the south. i don't want to mention his name because it was a private conversation. a southern senator i like and we worked on other issues and he says we're this close between what mcconnell and reid want and what he and i want and he's representative of large swath of republicans as i am democrats. it's clearly the best thing for our country. >> if it does pass the senate and goes to the house, it will pass the house if a large number of moderate republicans and moderate democrats support it in order to get the 216 votes they need. do you think that combination will work in the house of representatives? >> i would add it in a slightly different way. i would say 160, 170 democrats will vote for it. a small number of democrats will vote no. they only need a third of republicans. speaker boehner could bring a third of his caucus together to join overwhelming numbers of

democrats joining both parties in the senate because i think that's the mainstream view that people certainly in my part and enough republicans reflect that will do the right thing come monday by noon or so. >> let me leave you, senator brown, with some of the frustration that the american people are feeling right now. i'm sure your office is getting swamped with calls because people are angry all over the country that's gotten to this level. we have an ireport from marie cox of north canton, ohio, an area you probably know. listen to marie. >> let's stop the bickering and show of disrespect between the different parties and the parties and the president and get down to business. let's get out of this mess that we're in regardless of who got us here and how it happened. >> i'm sure you get a lot of frustration -- >> not only do i hear her. i read a couple letters on the

floor today. one from northern ohio and one from northeast ohio. same kind of sacrifice here. we should do what the senate is going to do and put this together. i didn't hear irene's last name. i would call her by that if i did. she's right. that's what we'll do in the next 24 hours. >> thank you. >> thank you, senator, offering a hopeful assessment that in the next few days the house and the senate can avert economic disaster. we're watching breaking news in the house. the process will move to the senate. much more coverage after this. 'w what i wanted to do. didn't like high school. and then i met my teacher, mr. mccooey, and that click happened. i would never have even thought about going into the engineering field if it wasn't for these ap classes, these teachers

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>> the house of representatives now voted to raise the nation's debt ceiling. the proposal legislation introduced by house speaker john boehner. 218 in favor. they needed it 216. no democrats in the house of representatives voted for the legislation. 22 republicans voted against the legislation and voted against the speaker hovering over all of this is the possibility that the first time in almost a century the united states' aaa rating could be damaged if no deal is struck. let's go to mary snow working this part of the story for us. a new recommendation from one of those credit rating agencies, moody's. explain to our viewers what moody's is saying about america's aaa rating. >> moody's came out late today saying it expects to affirm the aaa rating.

however, this means that likely there will be no immediate downgrade. it is also warning that it expects to put the u.s. on a negative outlook so it's not ruling out a downgrade saying that it is still a possibility in the next year and in this report that it issued it made it clear that it really wasn't sold on either plan put forth by republicans or democrats saying that there had been better options earlier this year but that they were not adopted so that is why it came out with this report and is also saying that it still maintains this negative outlook so it's not completely ruling out a downgrade but no immediate downgrade likely. this is one of three credit rating agencies and just to give you a little bit of perspective about what some of the other ones -- investors i talked to or traders i talked to are most concerned about s&p because standard & poor's had indicated that it was looking for cuts of

$4 trillion. that is still yet to be seen whether or not s&p would downgrade but apparently right now moody's is expecting to affirm that aaa credit rating. >> the key is right now to raise the nation's debt ceiling by tuesday and now it will go to the senate and then back to the house. we'll see if they can work out some kind of compromise. thanks very much. good explanation. let's bring back gloria borger watching this part of the story. you heard senator sharron brown, democrat of ohio, suggest that he's relatively optimistic that this deal can now be worked out not that house has done its job, he thinks cooler heads will prevail in the senate and there can be bipartisan support in the house. >> i think at least now people can start talking to each other about what can be achieved. it's very clear as you know when this goes back to the house, the speaker is probably going to lose half of his caucus any way.

he probably only needs a third of it democrats will supply most of the votes to raise the debt ceiling. it gives the speaker a little bit of negotiating room. what the speaker has done with this vote is he sat down a marker and he said this is what my republicans wanted and if you even want a third of my republicans or a half of my republicans, you're going to have to give me a chunk of what we voted for in the house. they believe it gives them a better negotiating position and they are right with the senate. the house has voted. >> stand by, gloria. we'll continue breaking news coverage. we're also taking a closer look at the tea party movement in the house of representatives. how does it emerge from this current debate. brian todd has been investigating. stand by. breaking news coverage continues right after this.

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the house of representatives has passed legislation introduced by speaker john boehner. a two-pronged process including

another vote early next year on a balanced budget amendment. the legislation passed by a vote of 218 to 210. no democrats voted for it. 22 republicans voted against it. they needed 216. they got 218. the tea party republicans have been flexing their muscles in this debt ceiling standoff but their strong arm tactics some would call it could backfire if the american public comes to view them as unrelenting extremists. brian todd has been taking a closer look at this phenomenon. >> the tea party has swayed john boehner. they've been unified and uncompromising. an effective performance but some believe this could have been a dangerous political play for them. you've seen it on john boehner's face when he emerged from the meetings with his party. a speaker who has been pressure

and pushed into a bill that leaves little room for republicans. how has the tea party shaped this debt debate in washington? >> the tea party has forced speaker boehner more to the right that involves deeper spending cuts and also support for the balance budget amendment. they have had disproportionate impact on the entire congressional debate. >> extraordinary considering the portion of the house they make up. >> they have 60 members. that's a quarter of the total number of republicans in the house. when john boehner had to delay the vote on his bill to get more votes, the tea partiers made up more than half of the republicans who were prepared to vote no. it's a continuation of the moment yum triggered last fall when they helped elect dozens of new congressman and came in to shock washington to spending less and cutting more. unwillingness to compromise has changed the way the government handles its debt. now even senator john mccain, a

budget hawk himself, this he say risk overreaching if they never compromise. >> to hold out and say we won't agree to raising the debt limit until we pass a balanced budget amendment to the constitution. it's unfair. it's bizarro. >> are tea party lawmakers playing with fire? >> they're going to pay a huge price. >> it may already be paying that price. in cnn polling since january of last year, public disapproval for the tea party has been steadily growing from 26% to 47% now. analysts darryl west say that may not hurt tea party congressman themselves in the next election because many come from safe districts but -- >> the republican presidential nominee may end up suffering the consequences because obama certainly is going to tie that gop nominee to the more extreme elements within the republican party in congress. >> many tea party lawmakers seem to relish the fight saying voters sent them to washington

on a mission and they're more worried about cutting spending than winning a popularity contest. >> despite this decrease in popularity in the national polls, some analysts suggest they could even do better and win some more seats next november. >> they could. i have spoken to a political analyst that tracks these races closely. he says there are three house seats now held by democrats in arkansas, oklahoma and indiana where those democrats won't run for re-election next year. those are areas of the country where the tea party has had support and could place candidates in there and probably will and may win them. they may gain house seats and gaining power. >> brian, thanks very, very much. this programming note for our viewers. they'll work all weekend, saturday, sunday, here in washington to make sure they get some sort of deal. they'll try to do it. we'll cover it every step of the way. i'll be back sundaturday night 0 p.m. eastern and tomorrow night we'll have a live "the situation room" right here in washington. sunday night by the way from

9:00 p.m. eastern until 11:00 p.m. eastern two-hour special report countdown to debt crisis. i'll be co-anchoring that as well. we'll be working hard all weekend for you. we'll take a quick break and go back to the white house and get reaction from the president of the united states and what are he and his top aides thinking when we come back. [ male announcer ] megared omega-3 krill oil from schiff.

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try megared today. you are looking at live pictures, the united states senate. you see harry reid. he is going to be speaking soon now that house of representatives have passed the legislation supported by john boehner. once he starting speaking, we will bring you to you live. and let's go to the white house. brianna keilar is there. any reaction from the white house officials, to what happened to the house? >> reporter: you know, no, wolf. so far, we are awaiting that information. right now, i think the white house is staying pretty mum on this. they are watching certainly the developments because even with this vote in the house of representatives, the waiting

game continues to see what happens in the senate. one of the things we have been looking for, wolf, from the white house is information about what happens, who gets paid, what doesn't get paid. in the case of a default, should there be one, though the white house insists that congress will increase the debt ceiling. you have holders of u.s. debt, this includes china, of course, and interest would need to be paid to the debt holders. you have recipients to government benefits, social security, act ti duty military, disabled veterans, a lot of people. and government contractors, companies, venders who would need to be paid. one of the ones, white house officials refer to, those who

provide services for troops overseas, wolf. >> we are taking a close look at the senate floor. we see harry reid. we think he is going to be speaking soon. once he does speak, we will bring it to the viewers. you see him speaking right now with john kerry from massachusetts. we'll be back.

the united states senate, the floor of the senate, harry reid expected to speak. once he does, outlines of what happens next to the senate once the house has acted. we will bring it to you. is president obama tough net so get the debt ceiling raced? he does have the bully pulpit but does he need to be more of a bully. jim acosta what are you finding out? >> reporter: other presidents have been bigger bullies. plr obama's credibility can be on the line. this could be one of those defining moments that make or break a presidency. >> so please to all the american people, keep it up. >> reporter: president obama

started his day with another call to america to crash the phones in congress. >> let yoush members of congress now. tweet, keep the pressure on washington. and we can get past this. >> reporter: it's a sign that as the clock ticks on the debt ceiling deadline, the president is staying on the deadlines, leaving the fight to members of congress. jim kouz essays they need to step it up. >> he needs to say that he is willing to roll up his sleeves. >> i have something to say, go ahead, make my day. >> reporter: there no make my day moments, no arm twisting. >> barack obama is calling to e-mail their congressman. that doesn't affect congressmen. that isn't the hammer.

>> there is leader for every season. and president obama is the right leader for the season we are in. >> reporter: cooler heads, she says, must prevail. it's hard to lead when the other sides won't meet you half way. they are playing chicken with the economy. >> is it a blood sport they are playing? they are trying to bring down the president? >> their have made it clear the number one goal is to bring down the president. >> reporter: only 41% of the americans approve of his handles of the kri sis. better than john boehner and harry reid. but the president could shoulder the blame if the u.s. fails to raise the debt ceiling. the stock market would drop 30%. a crash that would be many times worse than the frightening day on wall street after congress

rejected the financeable bail out plan. as for the twitter call to congress, it may have backfired. they have been targets gop. and you the account has lost thousands of followers today. >> they will probably pick up followe followers @barack obama. >> a lot of people they have been spanned. and result a little while ago, we checked, it's about 30,000 followers that the president's reelection company followers that lost. >> really? thanks. i want to remind viewers, harry reid. we expect him to speak